Austin, Texas-based InvestingAnswers published the list of what it called the 359 safest banks in the nation, including 17 in New York state, out of more than 7,300 it examined. Despite a belief that some have that the biggest banks may be the safest, the list included many small banks.

Islandia-based Gold Coast Bank, a four-branch bank, reported $244,000 in net income for its second quarter, compared to $163,000 a year ago.

“Some of the smaller banks are more sound. Sometimes, diversity is not a good thing,” Gold Coast CEO Joseph Perri said. “The large banks derive a significant amount of income from their investment banking-related activities, which is dangerous.”

Banks were evaluated based on a metric known as the Texas Ratio, initially used to predict bank failures in Texas during the 1980s and then nationwide in the 1990s. It’s widely viewed as a way of measuring financial health. The Texas Ratio compares a bank’s bad loans to the capital the institution has to cover these loans.

“One of the reasons we got such a clean bill of health is we don’t have any past due loans, any problem loans,” Perri said.

Gold Coast has $114 million in outstanding loans, but no loans that have fallen behind in payments or are at risk of doing so due to borrowers incurring losses.

“If too many of the bank’s loans are nonperforming, the bad loans will erode the bank’s equity cushion, which could cause the bank to fail,” Sara Glakas wrote in InvestingAnswers’ explanation of its methodology.

Perri said banks that didn’t make the cut may also be sound, but that the list still provides one way of singling out banks that are on solid footing.

“The Texas ratio has become a well-known, meaningful indicator of the likelihood of a bank failing,” he said. “From what I can ascertain, regulators look at this. But it’s just one indicator.”